(a) In all cases of mutual debts or mutual credits between the insurer and another person in connection with any action or proceeding under this chapter, the credits and debts shall be set off and the balance only shall be allowed or paid, except as provided in subsection (b).

Terms Used In Tennessee Code 56-9-319

  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Insurer: means any person who has done, purports to do, is doing or is licensed to do an insurance business, and is or has been subject to the authority of, or to liquidation, rehabilitation, reorganization, supervision, or conservation by, any insurance commissioner. See Tennessee Code 56-9-103
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Person: means any association, aggregate of individuals, business, company, corporation, individual, joint-stock company, Lloyds-type organization, organization, partnership, receiver, reciprocal or interinsurance exchange, trustee or society. See Tennessee Code 56-16-102
  • Reciprocal: means the aggregation of subscribers under a common name. See Tennessee Code 56-16-102
  • Subscription: includes a mark, the name being written near the mark and witnessed. See Tennessee Code 1-3-105
(b) No offset shall be allowed in favor of any such person where:

(1) The obligation of the insurer to the person would not, at the date of the entry of any liquidation order or otherwise, as provided in this chapter, entitle the person to share as a claimant in the assets of the insurer;
(2) The obligation of the insurer to the person was purchased by or transferred to the person with a view of its being used as an offset; or
(3) The obligation of the person is to pay an assessment levied against the subscribers of a reciprocal insurer, or is to pay a balance upon the subscription to the capital stock of a stock insurer.
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